September 7th, 2024 12:26 PM by T. Fanning
Hi, I hope you have a great weekend!
Federal Reserve Governor Christopher Waller supported an interest rate cut at the upcoming policy meeting, expressing openness to a significant reduction if needed. He emphasized the need for larger cuts if the labor market worsens faster than expected. Mortgage rates responded, dropping to their lowest levels since April 2023.
Next week starts quietly until Tuesday evening's Presidential Debate, likely a minor market mover. Key inflation readings and auction results on Wednesday and Thursday may drive midweek activity.
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans (100% FHA financing); Conventional 0% down; Conventional, FHA and VA 1x Close Construction-Perm; 1.50% Down FHA Advantage Program; CHFA Financing; HomeStyle renovation program; and a Jumbo, 5% down program. We can also do non-traditional programs! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
Last Updated: 9/6/24
Friday's bond market has opened in negative territory following this morning's mixed employment news. Stocks are moving in opposite directions with the Dow up 110 points and the Nasdaq down 141 points. The bond market is currently down 3/32 (3.74%), which should keep this morning's mortgage rates close to Thursday's early pricing.
Today's big news was the August's Employment report that showed only 142,000 new jobs were added to the economy last month when analysts were expecting 160,000. Also in the good news column were downward revisions to June and July's payroll numbers that lowered the combined job count by 86,000 from previous estimates.
Unfortunately, both of the other two headline numbers that we follow in the report were not good news. The unemployment rate slipped from July's 4.3% to 4.2%, as expected. Bad news came in the average hourly earnings reading that rose 0.4% last month and 3.8% annually. Forecasts had the monthly reading up 0.3% and annual at 3.7%. Particularly troublesome was the annual increase from July's 3.
These higher earnings numbers are a sign of wage inflation that easily spreads to other parts of the economy. It is this reading that is likely preventing a stronger positive reaction in the bond and mortgage markets. They also make a half-point rate cut by the Fed later this month less likely. The consensus is a quarter point move at the September 17-18 FOMC meeting.
Next week starts off light with nothing of relevance scheduled for Monday or Tuesday morning. The first event that we can expect a reaction to is Tuesday evening's Presidential Debate and that may not be a market mover. However, Wednesday and Thursday bring us a couple of key inflation readings during morning trading and auction results early afternoon. We should see the most movement in rates midweek, barring any major headlines over the weekend. Look for details on all of next week's activities in Sunday evening's weekly preview.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Float if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
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